RNS Number:6128O
Merrill Lynch & Co Inc
12 August 2003
New Accounting Pronouncements
On July 7, 2003, the American Institute of Certified Public Accountants ("AICPA
") issued Statement of Position ("SOP") 03-1, Accounting and Reporting by
Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for
Separate Accounts. The SOP provides guidance on accounting and reporting by
insurance companies for certain nontraditional long-duration contracts and for
separate accounts. The SOP is effective for financial statements for Merrill
Lynch beginning in 2004. The SOP requires the establishment of a liability for
contracts that contain death or other insurance benefits using a specified
reserve methodology that is different from the methodology that Merrill Lynch
currently employs. Depending on market conditions at the time of adoption, the
impact of implementing this reserve methodology may have a material impact on
the Condensed Consolidated Statement of Earnings.
On May 15, 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS'') No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity. SFAS No. 150 changes the accounting for certain financial instruments,
including mandatorily redeemable preferred stock and certain freestanding equity
derivatives, which under previous guidance were accounted for as equity. SFAS
No. 150 requires that mandatorily redeemable preferred shares, written put
options and physically settled forward purchase contracts on an issuer's shares,
and certain financial instruments that must be settled by issuing a variable
number of an issuer's shares, be classified as liabilities in the Condensed
Consolidated Balance Sheets.
SFAS No. 150 must be applied immediately to instruments entered into or modified
after May 31, 2003 and to all other instruments that exist beginning in the
third quarter of this year. Application to pre-existing contracts is recognized
as a cumulative effect of a change in accounting principle. Merrill Lynch does
not expect the adoption of SFAS No. 150 to have a material impact on the
Condensed Consolidated Financial Statements.
On April 30, 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. The new guidance amends SFAS No. 133 for decisions made as part of the
Derivatives Implementation Group ("DIG") process that effectively required
amendments to SFAS No. 133, and decisions made in connection with other FASB
projects dealing with financial instruments and in connection with
implementation issues raised in relation to the application of the definition of
a derivative and characteristics of a derivative that contains financing
components. In addition, it clarifies when a derivative contains a financing
component that warrants special reporting in the statement of cash flows. SFAS
No. 149 is effective for contracts entered into or modified after June 30, 2003
and for hedging relationships designated after June 30, 2003. Merrill Lynch is
currently assessing the impact of SFAS No. 149 on the Condensed Consolidated
Financial Statements.
On January 17, 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
which clarifies when an entity should consolidate another entity known as a
Variable Interest Entity ("VIE"), more commonly referred to as an SPE. A VIE is
an entity in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties, and may include many types of SPEs. FIN 46 requires
that an entity consolidate a VIE if that enterprise has a variable interest that
will absorb a majority of the VIE's expected losses, receive a majority of the
VIE's expected residual returns, or both. FIN 46 does not apply to qualifying
special purpose entities ("QSPEs"), the accounting for which is governed by SFAS
No. 140. FIN 46 is effective for VIEs created on or after February 1, 2003 and
for existing VIEs as of the third quarter of 2003. See Note 8 to the
Consolidated Financial Statements in the 2002 Annual Report for disclosures
regarding the expected impact of adoption of FIN 46 on Merrill Lynch's
Consolidated Balance Sheets. Also, see Note 5 to the Condensed Consolidated
Financial Statements for additional FIN 46 disclosure.
On December 31, 2002 the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123, Accounting for Stock-Based Compensation. SFAS No. 148 permits three
alternative methods for a voluntary transition to the fair value based method of
accounting for employee stock-based compensation. SFAS No. 148 continues to
permit prospective application for companies that adopt this standard prior to
the beginning of fiscal year 2004. SFAS No. 148 also allows for a modified
prospective application, which requires the fair value of all unvested awards to
be amortized over the remaining service period, as well as restatement of prior
years' expense. The transition guidance and disclosure provisions of SFAS No.
148 were effective for fiscal years ending after December 15, 2002. See Note 11
to the Condensed Consolidated Financial Statements for these disclosures.
On November 25, 2002, the FASB issued FIN 45, Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others, an Interpretation of FASB Statements Nos. 5, 57, and 107
and Rescission of FASB Interpretation No. 34. FIN 45 requires guarantors to
disclose their obligations under certain guarantees. It also requires a
guarantor to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee. The initial
recognition and measurement provisions of FIN 45 apply on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosures were
effective for financial statements of interim or annual periods ending after
December 15, 2002. See Note 10 to the Condensed Consolidated Financial
Statements for these disclosures.
In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. This standard requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. SFAS No. 146 replaces
the guidance provided by EITF Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring). Merrill Lynch adopted SFAS No. 146
as of January 1, 2003, which had no material impact on the Condensed
Consolidated Financial Statements.
Statistical Data
2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr.
Client Assets (dollars in billions) 2002 2002 2002 2003 2003
GPC:
U.S. $ 1,076 $ 997 $ 1,021 $ 1,009 $ 1,076
Non-U.S. 94 87 89 86 92
Total GPC Assets 1,170 1,084 1,110 1,095 1,168
MLIM direct sales 233 205 201 193 205
Total Client Assets $1,403 $1,289 $1,311 $1,288 $1,373
Assets in Asset-Priced Accounts $ 192 $ 177 $ 182 $ 181 $ 200
Assets Under Management:
Retail $ 203 $ 182 $ 189 $ 187 $ 195
Institutional 257 234 235 220 239
Private Investors(1) 39 36 38 35 37
U.S. 319 305 313 303 320
Non-U.S. 180 147 149 139 151
Equity 234 190 191 183 209
Fixed-income 121 119 122 108 108
Money market 144 143 149 151 154
Underwriting (dollars in billions):
Global Equity and Equity-Linked:
Volume $ 10 $ 3 $ 6 $ 4 $ 8
Market share 9.4 % 5.9 % 10.5 % 8.0 % 7.8 %
Global debt:
Volume $ 86 $ 65 $ 59 $ 95 $ 84
Market share 8.3 % 7.7 % 6.5 % 7.1 % 6.6 %
Full-Time Employees:
U.S. 42,400 41,800 40,000 39,200 38,200
Non-U.S. 12,000 11,400 10,900 10,400 10,100
Total 54,400 53,200 50,900 49,600 48,300
Private Client Financial Advisors 15,100 14,600 14,000 13,600 13,300
Balance Sheet (dollars in millions,
except per share amounts)
Total assets $ 453,834 $ 452,140 $ 447,928 $ 455,587 $ 481,075
Total stockholders' equity $ 21,592 $ 22,299 $ 22,875 $ 23,639 $ 24,781
Book value per common share $ 24.46 $ 25.17 $ 25.69 $ 24.97 $ 26.04
Share Information (in thousands)
Weighted-average shares outstanding:
Basic 861,742 864,629 868,160 887,553 897,202
Diluted 942,560 934,477 942,893 939,220 965,288
Common shares outstanding 865,398 869,019 873,780 929,768 935,152
(1) Represents segregated portfolios for individuals, small corporations and
institutions.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information under the caption Item 2. "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Risk Management" above in
this Report is incorporated herein by reference.
Item 4. Controls and Procedures
In 2002, ML & Co. formed a Disclosure Committee to assist with the monitoring
and evaluation of our disclosure controls and procedures. ML & Co.'s Chief
Executive Officer, Chief Financial Officer and Disclosure Committee have
evaluated the effectiveness of ML & Co.'s disclosure controls and procedures as
of the end of the period covered by this Form 10-Q. Based on this evaluation, ML
& Co.'s Chief Executive Officer and Chief Financial Officer have concluded that
ML & Co.'s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934) are effective. There have
been no significant changes in ML & Co.'s internal control over financial
reporting that occurred during the period covered by this Form 10-Q that have
materially affected, or are reasonably likely to materially affect, ML & Co.'s
internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The following supplements the discussion in ML & Co.'s Annual Report on Form 10-
K for the fiscal year ended December 27, 2002 and Current Reports on Form 8-K
dated March 17, 2003 and April 28, 2003:
Research-Related Class Actions.
On June 30, 2003, and July 2, 2003, the United States District Court for the
Southern District of New York granted Merrill Lynch's motions to dismiss three
class actions challenging the independence and objectivity of Merrill Lynch's
research recommendations and related disclosures. These decisions involved
research recommendations related to 24/7 Real Media, Inc. and Interliant, Inc.,
as well as claims involving Merrill Lynch Global Technology Fund, Inc. Although
the outcome cannot be predicted with certainty, Merrill Lynch's present
intention is to move to dismiss the remaining class actions in stages based
largely on the reasoning of the courts' June 30 and July 2 decisions.
Plaintiffs have moved for reconsideration of the court's decisions and, in
addition, have the right to appeal the decisions dismissing their claims to the
United States Court of Appeals for the Second Circuit.
Enron-Related Litigation
On or about May 28, 2003, United States District Court Judge Melinda Harmon and
U.S. Bankruptcy Judge Arthur Gonzales ordered the investment bank defendants in
certain of the Enron-related matters, including Merrill Lynch, to participate in
non-binding mediation. The outcome of the mediation cannot be predicted.
IPO Allocation Class Actions
On or about June 25, 2003, plaintiffs announced that they had entered into a
Memorandum of Understanding with the issuer defendants and the issuers' present
and former officers and directors. Under the terms of the Memorandum of
Understanding, the insurers of the issuers would guarantee recovery of at least
$1 billion by the class members. To the extent that plaintiffs recover from the
underwriter defendants, this amount would be reduced. Over 50 underwriters,
including Merrill Lynch, remain as defendants in the actions.
IPO Underwriting Spread Litigation
On or about June 27, 2003, the United States District Court for the Southern
District of New York denied defendants' motion to dismiss based on implied
immunity. Defendants' motion to dismiss on other grounds is pending.
Boston Chicken Litigation
Merrill Lynch is one of the defendants in Gerald K. Smith as Trustee for and on
behalf of the Estates of Boston Chicken, Inc. v Arthur Andersen LLP, et al., an
action pending in the United States District Court for the District of Arizona.
In that action, the Plan Reorganization Trustee has claimed, among other things,
that the defendants (including Merrill Lynch) damaged Boston Chicken by
allegedly contributing to Boston Chicken's decisions to incur more than a
billion dollars in obligations over a five-year period (1993-1998), during which
the Trustee claims Boston Chicken was insolvent. No trial date has been set.
Merrill Lynch is vigorously defending the action and anticipates filing a motion
for summary judgment in January 2004.
Shareholder Derivative Action
In the following shareholder derivative action ML & Co. is named as a nominal
defendant because the action purports to be brought on behalf of ML & Co. and
any recovery obtained by plaintiffs would be for the benefit of ML & Co.:
Mullin v. Komansky, et al., a derivative action instituted on or
about June 19, 2003, in the Supreme Court of the State of New York, County of
New York, alleges breach of fiduciary duty by ML & Co. directors in connection
with, among other things, allegedly failing to establish internal controls
sufficient to ensure that the company's research activities were carried out in
a lawful manner. The case is similar to Spear v. Conway, et al., previously
disclosed in ML & Co.'s Form 10-K for the year ended December 27, 2002, in which
Merrill Lynch has filed a motion to dismiss. Merrill Lynch intends to move to
dismiss this action as well.
Other
Merrill Lynch has been named as a defendant in various other legal actions,
including arbitrations, class actions, and other litigation arising in
connection with its activities as a global diversified financial services
institution. The general decline of equity securities prices that began in 2000
has resulted in increased legal actions against many firms, including Merrill
Lynch, and will likely result in higher professional fees and litigation
expenses than those incurred in the past.
Some of the legal actions include claims for substantial compensatory and/or
punitive damages or claims for indeterminate amounts of damages. In some cases,
the issuers who would otherwise be the primary defendants in such cases are
bankrupt or otherwise in financial distress. Merrill Lynch is also involved in
investigations and/or proceedings by governmental and self-regulatory agencies.
The number of these investigations has also increased in recent years with
regard to many firms, including Merrill Lynch.
Given the number of these legal actions, investigations and proceedings, some
are likely to result in adverse judgments, settlements, penalties, injunctions,
fines, or other relief. Merrill Lynch believes it has strong defenses to, and
where appropriate, will vigorously contest these actions. In view of the
inherent difficulty of predicting the outcome of such matters, particularly in
cases in which claimants seek substantial or indeterminate damages, Merrill
Lynch often cannot predict what the eventual loss or range of loss related to
such matters will be. Merrill Lynch believes, based on information available to
it, that the resolution of these actions will not have a material adverse effect
on the financial condition of Merrill Lynch as set forth in the Condensed
Consolidated Financial Statements, but may be material to Merrill Lynch's
operating results or cash flows for any particular period and may impact ML &
Co.'s credit ratings.
Item 4. Submission of Matters to a Vote of Security Holders
On April 28, 2003, ML & Co. held its Annual Meeting of Stockholders. Further
details concerning matters submitted for stockholder vote can be found in ML &
Co.'s Quarterly Report on Form 10-Q for the quarterly period ended March 28,
2003.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4 Instruments defining the rights of security holders, including
indentures:
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, ML & Co.
hereby undertakes to furnish to the Securities and Exchange
Commission, upon request, copies of the instruments defining the
rights of holders of long-term debt securities of ML & Co. that
authorize an amount of securities constituting 10% or less of the
total assets of ML & Co. and its subsidiaries on a consolidated basis.
10 Written description of ML & Co.'s compensation policy for directors
effective May 1, 2003.
12 Statement re: computation of ratios.
15 Letter re: unaudited interim financial information.
31.1 Certification of the Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 Charter of the Public Policy and Responsibility Committee of the ML &
Co. Board of Directors.
(b) Reports on Form 8-K
The following Current Reports on Form 8-K were filed with or furnished to
the Securities and Exchange Commission during the quarterly period covered
by this report:
(i) Current Report dated April 3, 2003 for the purpose of filing the form
of ML & Co.'s 8% Callable STock Return Income DEbt Securities SM due
April 5, 2005, payable at maturity with Comcast Corporation Class A
common stock.
(ii) Current Report dated April 9, 2003 for the purpose of furnishing
notice of a webcast of a conference call scheduled for April 16, 2003
to review ML & Co.'s operating results.
(iii)Current Report dated April 16, 2003 for the purpose of filing ML &
Co.'s Preliminary Unaudited Earnings Summaries for the three months
ended March 28, 2003.
(iv) Current Report dated April 28, 2003 for the purpose of reporting the
announcement by the Securities and Exchange Commission, New York
Stock Exchange, National Association of Securities Dealers, and state
securities regulators that the settlements-in-principle that the
regulators had disclosed on December 20, 2002 related to alleged
conflicts of interest affecting research analysts had been reduced to
final settlements with regard to ten securities firms, including
Merrill Lynch.
(v) Current Report dated April 29, 2003 for the purpose of filing the form
of ML & Co.'s 9% Callable STock Return Income DEbt SecuritiesSM due
April 29, 2005, payable at maturity with Best Buy Co., Inc. common
stock.
(vi) Current Report dated May 2, 2003 for the purpose of filing the form of
ML & Co.'s Global Currency Basket Notes due May 3, 2004.
(vii)Current Report dated May 2, 2003 for the purpose of filing the form of
ML & Co.'s Market Recovery NotesSM Linked to the Nasdaq-100 Index(R)
due July 22, 2004.
(viii)Current Report dated May 2, 2003 for the purpose of filing the form
of ML & Co.'s 9% Callable STock Return Income DEbt SecuritiesSM due
May 9, 2005, payable at maturity with Nextel Communications, Inc.
Class A common stock.
(ix) Current Report dated May 6, 2003 for the purpose of furnishing
notice of a webcast of a presentation by the president of ML & Co.'s
Global Private Client Group scheduled for May 13, 2003.
(x) Current Report dated May 30, 2003 for the purpose of filing the form
of ML & Co.'s Multi-Currency Notes due May 31, 2005.
(xi) Current Report dated June 3, 2003 for the purpose of filing the form
of ML & Co.'s S&P 500(R) Market Index Target-Term Securities(R) due
June 3, 2010.
(xii)Current Report dated June 3, 2003 for the purpose of filing the form
of ML & Co.'s SUMmation SecuritiesSM Linked to the Performance of the
S&P 500(R) Index due September 3, 2008.
(xiii)Current Report dated June 10, 2003 for the purpose of filing the form
of ML & Co.'s Warrant Agreement dated as of June 10, 2003 between ML &
Co. and JPMorgan Chase Bank.
(xiv)Current Report dated June 27, 2003 for the purpose of filing the form
of ML & Co.'s Strategic Return Notes(R) Linked to the Select Ten Index
due June 27, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MERRILL LYNCH & CO., INC.
(Registrant)
By: /s/ Ahmass L. Fakahany
Ahmass L. Fakahany
Ahmass L. Fakahany
Executive Vice President and
Chief Financial Officer
By: /s/ John J. Fosina
John J. Fosina
Controller
Principal Accounting Officer
Date: August 7, 2003
INDEX TO EXHIBITS
Exhibits
10 Written description of ML & Co.'s compensation policy for directors
effective May 1, 2003.
12 Statement re: computation of ratios.
15 Letter re: unaudited interim financial information.
31.1 Certification of the Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 Charter of the Public Policy and Responsibility Committee of the ML &
Co. Board of Directors.
Exhibit 10
Written description of ML & Co.'s compensation policy for directors effective
May 1, 2003.
Compensation of Directors
Fees and Expenses
The independent non-employee directors are paid the following compensation for
service as members of the Board of Directors and as members of our standing
Board Committees. The directors are also reimbursed for out-of-pocket expenses
incurred in attending Board and Board Committee meetings and if fulfilling their
duties as directors.
* $75,000 annually in base compensation to each non-employee director
* $25,000 annually to the Chairman of the Management Development and
Compensation Committee and the Chairman of the Audit Committee
* $15,000 to the Chairman of the Public Policy and Responsibility Committee,
the Chairman of the Finance Committee and the Chair of the Nominating and
Corporate Governance Committee.
* In the event that a Board member serves as the chairman of two Board
Committees, he or she shall receive an annual payment equal to 100% of the
amount payable for serving as chairman of the committee with the higher
annual fee and 50% of the amount payable for serving as chairman of the
committee with the smaller annual fee.
Non-employee directors are entitled to defer all or a portion of their cash
compensation. Deferred payments are held in accounts with values indexed either
to the performance of selected mutual funds and certain sponsored employee
partnerships, or to the performance of our common stock, including reinvested
dividends.
Non-employee directors also receive an annual grant of deferred stock units
valued at $72,500 and annual grants of stock options also valued at $72,500
under the Non-Employee Director's Plan. Deferred stock units represent the
Company's obligation to deliver one share of our common stock for each unit. The
grants are made following the Annual Meeting. If a director joins the Board in
mid-year, he or she would receive a pro-rated grant.
Deferred stock units are payable at the end of a five-year deferral period, or
earlier if the non-employee director's service on the Board ends. These units
receive dividend equivalents but may not vote. Payment of the deferred stock
units may be further deferred prior to payment. The stock options granted to
non-employee directors entitle the holder to receive one share of our common
stock upon payment of the exercise price, which is the average of the high and
low prices of our common stock on the grant date. These stock options become
exercisable six months following the date of grant.
Retirement
Directors who joined the Board of Directors after February 2001 are not eligible
for pension benefits. Non-employee directors who served prior to that date are
entitled to receive, at their election, either lifetime annual retirement
payments, a lump-sum payment, or a death benefit when they end their service for
any reason (other than cause), in each case in the amount to be paid in respect
of their retirement benefit is limited by the directors' 2001 annual base
compensation of $55,000 annually.
Benefits
Non-employee directors who joined the Board after February 2001 are not eligible
for medical insurance benefits. These benefits are offered to non-employee
directors who joined the Board prior to that date and to their eligible family
members. These benefits are generally comparable to those offered to our
employees, except that we provide these benefits on a non-contributory basis and
with differences in deductible, coinsurance and lifetime benefits.
EXHIBIT 12
MERRILL LYNCH & CO., INC. AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in millions)
For the Three Months Ended For the Six Months Ended
June 27, June 28, June 27, June 28,
2003 2002 2003 2002
Pre-tax earnings $1,466 $948 $2,488 $1,960
Add: Fixed charges
(excluding capitalized
interest and preferred
security dividend
requirements of
subsidiaries) 2,021 2,441 4,132 4,965
Pre-tax earnings before
fixed charges 3,487 3,389 6,620 6,925
Fixed charges:
Interest 1,973 2,389 4,035 4,858
Other (a) 96 100 193 204
Total fixed charges 2,069 2,489 4,228 5,062
Preferred stock dividend 13 13 26 27
requirements
Total combined fixed
charges and preferred
stock dividends $2,082 $2,502 $4,254 $5,089
Ratio of earnings to fixed 1.69 1.36 1.57 1.37
charges
Ratio of earnings to
combined fixed charges
and preferred stock 1.67 1.35 1.56 1.36
dividends
(a) Other fixed charges consist of the interest factor in rentals, amortization
of debt issuance costs, preferred security dividend requirements of
subsidiaries, and capitalized interest.
Exhibit 15
August 7, 2003
Merrill Lynch & Co., Inc.
4 World Financial Center
New York, NY 10080
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim condensed
consolidated financial information of Merrill Lynch & Co., Inc. and subsidiaries
("Merrill Lynch") as of June 27, 2003 and for the three-month and six-month
periods ended June 27, 2003 and June 28, 2002, as indicated in our report dated
August 7, 2003; because we did not perform an audit, we expressed no opinion on
that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended June 27, 2003, is
incorporated by reference in the following Registration Statements, as amended:
Filed on Form S-8:
Registration Statement No. 33-41942 (1986 Employee Stock Purchase Plan)
Registration Statement No. 33-17908 (Incentive Equity Purchase Plan)
Registration Statement No. 33-33336 (Long-Term Incentive Compensation Plan)
Registration Statement No. 33-51831 (Long-Term Incentive Compensation Plan)
Registration Statement No. 33-51829 (401(k) Savings and Investment Plan)
Registration Statement No. 33-54154 (Non-Employee Directors' Equity Plan)
Registration Statement No. 33-54572 (401(k) Savings and Investment Plan
(Puerto Rico))
Registration Statement No. 33-56427 (Amended and Restated 1994 Deferred
Compensation Plan for a Select Group of Eligible Employees)
Registration Statement No. 33-55155 (1995 Deferred Compensation Plan
for a Select Group of Eligible Employees)
Registration Statement No. 33-60989 (1996 Deferred Compensation Plan
for a Select Group of Eligible Employees)
Registration Statement No. 333-00863 (401(k) Savings & Investment Plan)
Registration Statement No. 333-09779 (1997 Deferred Compensation Plan
for a Select Group of Eligible Employees)
Registration Statement No. 333-13367 (Restricted Stock Plan for Former
Employees of Hotchkis and Wiley)
Registration Statement No. 333-15009 (1997 KECALP Deferred Compensation
Plan for a Select Group of Eligible Employees)
Registration Statement No. 333-17099 (Deferred Unit and Stock Unit Plan
for Non-Employee Directors)
Registration Statement No. 333-18915 (Long-Term Incentive Compensation Plan
for Managers and Producers)
Registration Statement No. 333-32209 (1998 Deferred Compensation Plan
for a Select Group of Eligible Employees)
Registration Statement No. 333-33125 (Employee Stock Purchase Plan for
Employees of Merrill Lynch Partnerships)
Registration Statement No. 333-41425 (401(k) Savings & Investment Plan)
Registration Statement No. 333-56291 (Long-Term Incentive Compensation Plan
for Managers and Producers)
Registration Statement No. 333-60211 (1999 Deferred Compensation Plan
for a Select Group of Eligible Employees)
Registration Statement No. 333-62311 (Replacement Options; Midland Walwyn
Inc.)
Registration Statement No. 333-85421 (401(k) Savings and Investment Plan)
Registration Statement No. 333-85423 (2000 Deferred Compensation Plan
For a Select Group of Eligible Employees)
Registration Statement No. 333-92663 (Long-Term Incentive Compensation Plan
for Managers and Producers)
Registration Statement No. 333-44912 (2001 Deferred Compensation Plan for a
Select Group of Eligible Employees)
Registration Statement No. 333-64676 (1986 Employee Stock Purchase Plan)
Registration Statement No. 333-64674 (Long-Term Incentive Compensation Plan
for Managers and Producers)
Registration Statement No. 333-68330 (2002 Deferred Compensation Plan for a
Select Group of Eligible Employees)
Filed on Form S-3:
Debt Securities, Warrants, Common Stock, Preferred Securities, and/or
Depository Shares:
Registration Statement No. 33-54218
Registration Statement No. 2-78338
Registration Statement No. 2-89519
Registration Statement No. 2-83477
Registration Statement No. 33-03602
Registration Statement No. 33-17965
Registration Statement No. 33-27512
Registration Statement No. 33-33335
Registration Statement No. 33-35456
Registration Statement No. 33-42041
Registration Statement No. 33-45327
Registration Statement No. 33-45777
Registration Statement No. 33-49947
Registration Statement No. 33-51489
Registration Statement No. 33-52647
Registration Statement No. 33-55363
Registration Statement No. 33-60413
Registration Statement No. 33-61559
Registration Statement No. 33-65135
Registration Statement No. 333-13649
Registration Statement No. 333-16603
Registration Statement No. 333-20137
Registration Statement No. 333-25255
Registration Statement No. 333-28537
Registration Statement No. 333-42859
Registration Statement No. 333-44173
Registration Statement No. 333-59997
Registration Statement No. 333-68747
Registration Statement No. 333-38792
Registration Statement No. 333-52822
Registration Statement No. 333-83374
Registration Statement No. 333-105098
Medium Term Notes:
Registration Statement No. 2-96315
Registration Statement No. 33-03079
Registration Statement No. 33-05125
Registration Statement No. 33-09910
Registration Statement No. 33-16165
Registration Statement No. 33-19820
Registration Statement No. 33-23605
Registration Statement No. 33-27549
Registration Statement No. 33-38879
Other Securities:
Registration Statement No. 333-02275 (Long-Term Incentive Compensation
Plan)
Registration Statement No. 333-24889 (Long-Term Incentive Compensation
Plan, and Long-Term Incentive Compensation Plan for Managers and Producers)
Registration Statement No. 333-36651 (Hotchkis and Wiley Resale)
Registration Statement No. 333-59263 (Exchangeable Shares of Merrill
Lynch & Co., Canada Ltd. re: Midland Walwyn Inc.)
Registration Statement No. 333-67903 (Howard Johnson & Company Resale)
Registration Statement No. 333-45880 (Herzog, Heine, Geduld, Inc. Resale)
We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of a Registration Statement
prepared or certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
New York, New York
Exhibit 31.1
Certification of Chief Executive Officer
I, E. Stanley O'Neal, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Merrill Lynch & Co.,
Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
/s/ E. Stanley O'Neal
E. Stanley O'Neal
Chairman of the Board and
Chief Executive Officer
Dated: August 7, 2003
Exhibit 31.2
Certification of Chief Financial Officer
I, Ahmass L. Fakahany, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Merrill Lynch & Co.,
Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
/s/ Ahmass L. Fakahany
Ahmass L. Fakahany
Executive Vice President and
Chief Financial Officer
Dated: August 7, 2003
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Merrill Lynch & Co., Inc. (the "
Company") on Form 10-Q for the period ended June 27, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, E.
Stanley O'Neal, Chairman of the Board and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ E. Stanley O'Neal
E. Stanley O'Neal
Chairman of the Board and
Chief Executive Officer
Dated: August 7, 2003
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Merrill Lynch & Co., Inc. (the "
Company") on Form 10-Q for the period ended June27, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Ahmass
L. Fakahany, Executive Vice President and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Ahmass L. Fakahany
Ahmass L. Fakahany
Executive Vice President and
Chief Financial Officer
Dated: August 7, 2003
Exhibit 99.1
Effective July 28, 2003
MERRILL LYNCH & CO., INC.
PUBLIC POLICY AND
RESPONSIBILITY COMMITTEE
OF THE
BOARD OF DIRECTORS
PURPOSE
To assist the Board of Directors and Senior Management in overseeing the
Corporation's fulfillment of its Principles of Respect for the Individual,
Teamwork, Responsible Citizenship and Integrity by reviewing and, where
appropriate, making recommendations about:
* The Corporation's policies and actions as they relate to the above
Principles
* The Corporation's political and charitable contributions policies and
practices
* The Corporation's policies and actions as they relate to social and public
policy issues that affect the Corporation's business throughout the world.
MEMBERSHIP
The Committee shall be composed of not fewer than three directors, none of whom
shall be, or within one year of appointment, shall have been, employees of the
Corporation. However, if a vacancy occurs, the Committee is authorized to
continue to exercise its authority with fewer than three directors, but not less
than two, until such time as the Board of Directors fills such vacancy. The
Board of Directors may designate alternate members of the Committee. The Chair
of the Committee shall be appointed by the Board of Directors.
AUTHORITY STATEMENT
To review and make recommendations concerning:
* The Corporation's policies and business activities in light of the
Corporation's Principles of Respect for the Individual, Teamwork,
Responsible Citizenship and Integrity.
* The Corporation's policies and actions as they relate to social and public
policy issues.
* The Corporation's business policies and practices relative to the Foreign
Corrupt Practices Act and similar laws worldwide.
To review and oversee:
* The Corporation's charitable contribution policies and practices in all
areas.
* The Corporation's political contribution policies and practices worldwide,
including direct contributions by the Corporation and its subsidiaries,
contributions by the Corporation's political action committee and, where
regulatory considerations apply, direct employee contributions.
Any matter relating to the foregoing which is referred to the Committee by the
Board of Directors or any other committee thereof.
This information is provided by RNS
The company news service from the London Stock Exchange
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